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Archive March 2019

THE IMPACT OF THE FINANCING LAW IN THE CORPORATE SECTOR

Law 1943 of 2018, known as the “financing law”, is nothing more than a tax reform that aims to achieve greater tax collection to address the fiscal deficit, however, the Government has stated that this law seeks to encourage private investment and to boost the economic development of the country, through the generation of jobs.

Law 1943 of 2018, known as the “financing law”, is nothing more than a tax reform that aims to achieve greater tax collection to address the fiscal deficit, however, the Government has stated that this law seeks to encourage private investment and to boost the economic development of the country, through the generation of jobs.

In order to illustrate our readers, we have decided to mention some of the changes in taxes, which the business sector must face, and those which we consider occupy a higher percentage in business activities.

Equity Tax: it is created for the years 2019, 2020 and 2021. The equity tax is generated by having a liquid wealth, as of January 1 of 2019, whose value is equal to, or greater than, $5,000 million Colombian pesos. The rate will be 1% for each year. The tax is payable on January 1 of 2019, 2020 and 2021.
This tax will be applied to:

Natural persons, illiquid inheritances and income tax payers. Although the law does not expressly mention legal persons, it must be interpreted as meaning that they are taxpayers of income tax and, therefore, are also subject to wealth/equity tax.
Natural persons, nationals or foreign non-residents, regarding to the patrimony directly possessed in Colombia, or indirectly possessed through permanent establishments, except for the exceptions of international treaties and law. In the latter case, the formal duty, to declare, corresponds to the branches or permanent establishments. Foreign entities that do not declare income, and that own assets in Colombia other than shares, accounts receivable, and/or portfolio investments, indicated in the law, such as real estates, yachts, boats, boats, works of art, aircrafts or mining or oil rights, that is to say, foreign entities that do not declare income and have assets in Colombia such as shares, accounts receivable and/or portfolio investments, are not subject to this tax, but if they have other taxed assets that exceed 5,000 million Colombian pesos, then they will be subject to this tax.
Illiquid successions of non-resident causers at the time of death, with respect to …